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Abstract

Post-independence South Sudan faces numerous development obstacles and oil is by many considered to be a redeeming factor for the new state. This paper explores the resource curse related to the country’s oil industry. South Sudan, with its long history of civil war, is in a difficult situation when trying to build state capacity. With good management, however, the oil can largely benefit the new state. The paper addresses what can be learned from Norway’s history of oil development and how Norway can assist South Sudan in managing the oil in order to benefit the people. Key elements of the assistance are the implementation of the CPA, technical support focusing on increased oil recovery, and building a stronger state capacity. But given that the time span of oil is shorter than first predicted, the heavily oil-reliant South Sudan must utilize incoming revenue as a part of an economic diversification process. Suggested areas are agriculture, mining, and hydropower, where the latter is an area that could significantly benefit from Norwegian expertise. A shift from oil to hydropower is in the interest of both states since it will provide South Sudan with clean energy while allowing Norway to promote environmental sustainability.